ANNUAL ACCOUNTS 2017 ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2017 AND REPORT OF THE RÉVISEUR D ENTREPRISES AGRÉÉ ONELIFE

Transcription

1 ANNUAL ACCOUNTS 2017 ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2017 AND REPORT OF THE RÉVISEUR D ENTREPRISES AGRÉÉ ONELIFE THE ONELIFE COMPANY S.A. RCS LUXEMBOURG: B

2 TABLE OF CONTENTS Board of Directors, Managing Director, Réviseur d Entreprises Agréé 2 Introduction by the Managing Director on the Company s activities and results in Directors Report 5 Report of the Réviseur d Entreprises Agréé 10 Balance Sheet as at 31 December Profit and Loss Account for the year ended 31 December Notes to the Annual Accounts for the year ended 31 December / 32

3 1 BOARD OF DIRECTORS, MANAGING DIRECTOR, RÉVISEUR D ENTREPRISES AGRÉÉ Board of Directors Michel Wolter, Chairman of the Board of Directors Paul Wolff Thierry Porté Marc Stevens Christopher Baker Jean-Luc Jancel Peter Yordan Managing Director Marc Stevens Secretary of the Board Antonio Corpas Réviseur d Entreprises Agréé Deloitte Audit, Société à Responsabilité Limitée 2 / 32

4 2 INTRODUCTION BY THE MANAGING DIRECTOR ON THE COMPANY S ACTIVITIES AND RESULTS IN marked a year of significant progress at OneLife. The Company celebrated its first anniversary under the OneLife brand that is a key catalyst in propelling the Company into new markets and forging lasting relationships with its business partners. Its value proposition which combines wealth planning expertise with extensive cross-border knowledge together with a strong capability in nontraditional assets are all key differentiators for the Company in today s marketplace. In addition to reaffirming its leadership position in the Belgian market, the Company also grew its reach in other core markets, including France, Denmark, Luxembourg and the Nordics, with development well underway for the UK, as well as for its most recent regions Iberia and Latin America. The Company recorded a new overall business premium for the year of over 40% compared to 2016, thanks to partners trust in confiding new business to the Company. This diversification of business across markets and extending distribution network strongly supports the strategic growth of the Company. Enhancing its existing product range, the Company also launched a series of new products to cater to the needs of its partners and their clients. These included: Capitalisation Finland, a Belgian Pension Product (IPT), Wealth Spain & Wealth Portugal, Capitalisation Denmark and Capitalisation Luxembourg. The company strengthened its team by recruiting for a number of key positions in Sales, Wealth Structuring and Customer Services to further support business development. In 2017, OneLife completed the streamlining of its business operations. Today, OneLife operates simply as The OneLife Company S.A., held directly by The OneLife Holding S.à r.l. The Company successfully completed the next phase in the consolidation of its IT systems in 2017 migrating to a single policy administration platform, the final stages of which will be completed in early As a now recognised leader in digital technologies, the Company also deployed a number of key initiatives in 2017 to improve the customer experience. These include the availability of the OneLife OneApp for all partners and clients across its core markets, giving access to portfolio information 24/7. In addition, the introduction for the French and Belgian markets of B2B data exchange or aggregation services enabling the consultation of client portfolios, including life assurance policies, in a single view. The Company also launched its Digital Days in June 2017 to fully engage employees in the digital transformation process. These two days of discovery and training in digital technologies aimed at raising awareness of its advantages and helping employees to implement digital innovation in their daily jobs to improve the partner-client experience. In recognition of its Digital Days, OneLife was awarded the Luxembourg Employee Experience Award by HROne. A new on-line learning platform for all OneLife employees was introduced in September giving them access to thousands of learning opportunities through Lynda.com by LinkedIn. In terms of financial performance, the Company delivered a significant increase in new business premiums up over 40% compared to the previous year. In continuity of the initiatives launched in 2015 and 2016, the Company implemented different actions in order to increase profitability through a combination of revenue growth, improved use of capital and strict cost control. The Company reported a profit of EUR 5.9 million in 2017 (EUR 4.4 million in 2016). 3 / 32

5 INTRODUCTION BY THE MANAGING DIRECTOR ON THE COMPANY S ACTIVITIES AND RESULTS IN The Company cashed EUR 506 million in new premiums, which brought the overall Company Assets Under Management to EUR 5.2 billon. Finally, it is noteworthy that the Company is adequately capitalised for the risks inherent to the business written, maintaining its capital level throughout 2017 in accordance with the capital management policy and regulatory requirements. As at 31 December 2017, the Company s quarterly solvency ratio was 253% under Solvency I regime and 167% under Solvency II regime. This performance was achieved thanks to the trust our partners place in OneLife and to the hard work of all our employees throughout The high level of collaboration between departments and effective teamwork makes our company particularly agile and responsive to partner and client needs and is a key competitive advantage which drives growth. On behalf of the Board of Directors and the Executive Committee, I would like to thank our staff for their commitment and engagement and look forward to continued strong results in 2018 Luxembourg, 10 April 2018 Marc Stevens Managing Director 4 / 32

6 3 DIRECTORS REPORT The Directors present their Annual Report together with the audited Annual Accounts for the year ended 31 December Principal activity and changes in 2017 The OneLife Company S.A. (the Company) is a life insurance company incorporated in Luxembourg on 26 June The 100% shareholder and parent of the Company is The OneLife Holding S.à r.l. which is incorporated in Luxembourg. For the purposes of these Annual Accounts, The OneLife Holding S.à r.l. and all its subsidiaries are referred to as the Group. The Company is authorised by the Commissariat aux Assurances to provide: life insurances, annuities, pensions and retirement benefits, and reinsurance operations on business of a similar nature; and to conduct investment and real estate activity relating to the principal objective. The OneLife Company S.A. sources and administers its business through its head office in Luxembourg and through distribution partnerships in Luxembourg and other EU countries. The Company does not have and has not had any branches during the year under review. The Company offers cross-border financial solutions through unit-linked products for financial planning and wealth structuring purposes. These are life insurance products where the premium paid is invested in collective external funds, collective internal funds and dedicated funds and the benefit payable under the policy is linked to the value of these funds at the time of payment. Financial year 2017 In terms of financial performance, the Company delivered significantly better financial results than initially budgeted. In continuity of the initiative that started in 2015, the Company implemented different actions in order to increase profitability through a combination of revenue growth, improved use of capital and strict cost control. The Company reported a profit of EUR 5.9 million in 2017 (compared to a profit of EUR 4.4 million in 2016). The earned premium net of reinsurance amounted to EUR million (2016: EUR million). Belgium remains the Company s primary market with additional core markets being France, Luxembourg, UK, Iberia, Latin America, Finland and Sweden Claims incurred, net of reinsurance, amounted to EUR million (charge) and are driven by surrenders for both the Dedicated Funds and the Unit-Linked business. This is a stable figure compared to 2016 when Claims incurred, net of reinsurance amounted to EUR million (charge). 5 / 32

7 DIRECTORS REPORT 3 Caption Change in other technical provisions, net of reinsurance stands at EUR million (charge) versus an income of EUR million in The company is exposed to financial impacts from variations in the value of the underlying investments caused by changes in interest rates, liquidity, foreign exchange rates and equity exposure. Unrealised gains on investments decreased to EUR million (2016: EUR million) and unrealised losses on investments decreased from EUR million in 2016 to EUR million in These developments reflect the volatility of markets and exchange rates, notably the USD and the GBP. The increase in investment income to EUR 95.8 million in 2017 in comparison to EUR 90.6 million in 2016 is subject to the same driving factors. Net operating expenses decreased to EUR 47.9 million from EUR 56 million in 2016 due to strict cost controls as well as an in depth review of the structure and processes across all entities and operations of the Group. The Company did not conduct any activities in the field of research and development or repurchase of own shares in Assets under management The Assets under Management remained at EUR 5.2 billion as at the end of December 2017 and Outlook and strategy The Company will maintain its strategic growth by developing relationships with key partners and deploying new solutions to meet the requirements of its international clients, while implementing its ambitious Digital roadmap. Digital innovations in 2018 include the implementation of a fully electronic onboarding process, automated KYC/AML processing through RegTech and further developments in the area of Robot Processing Automation. The company s value proposition which combines wealth planning expertise with extensive cross-border knowledge together with a strong capability in non-traditional assets are all key differentiators for the Company in today s marketplace. Finally, the Company will continue to consolidate its financial position in terms of profitability and solvency as well as preparing for new regulation in 2018 such as the Insurance Distribution Directive (IDD) and Global Data Protection Regulation (GDPR). Risk management Risk Management is the process of identifying, assessing, responding, monitoring, controlling and reporting risks. The risk management system forms an integral part of the management and Board processes and the decision- making framework applied across the Company. 6 / 32

8 DIRECTORS REPORT 3 The key elements are: Risk strategy; Risk appetite; Risk governance, including risk policies and complete set of business internal rules; Risk map; Monitoring of the risk exposure; Risk oversight committees and defined roles and responsibilities; Processes used to identify, assess, report and treat risks. For the purposes of risk identification and assessment and as aligned with the Risk Management Policy, risks are grouped by risk type. Financial Risk Operational Risk Strategic Risk Governance Risk These risks may affect key metrics of Solvency, Earnings and Liquidity and Risk appetite is set relative to the previously mentioned metrics and to operational and reputational criteria. Roles and responsibilities for risk management in the Company are based around the three lines of defence model: First Line of Defence Day-to-day Risk Management, performed by the various departments under the supervision of department heads; Second Line of Defence Risk Oversight, performed by the Actuarial function, the Risk Management function, the Compliance function; Third Line of Defence Independent Assurance, performed by the Internal Audit department. The Risk function is accountable for quantitative and qualitative oversight and challenge of the risk management processes and for developing the risk management system. Compliance is responsible for ensuring that business practices stay within legal and regulatory requirements. Internal Audit provides an independent assessment of the risk system and internal control processes. Within the Group s operating departments, there are a number of individuals identified to fulfil the role of the Risk Correspondent. They are the point of contact for the Company s Risk Management Team to coordinate risk event reporting and to participate in the conducting of the department s risk assessment process. The Company Board has overall responsibility for determining risk appetite, which is an expression of the risk the business is willing to take. The oversight of risk and risk management at the Group level is supported by the Risk & Control Committee that focuses on financial, strategic and governance risks as well as on Operational and Reputational risks. Capital management In the reports on the financial strength of the Company, capital and solvency are measured according to the regulations prescribed by the Commissariat aux Assurances. These regulatory capital tests are based on required levels of solvency capital and a series of prudent assumptions with respect to the type of business written by the Company. 7 / 32

9 DIRECTORS REPORT 3 The Company s objectives in managing its capital are: to match its assets and liabilities profiles, taking into account the risks inherent to the business; to satisfy its regulatory requirements. The Company s capital management policy is designed to ensure that the nature and the amount of capital are sufficient to meet regulatory capital requirements and that the Company is adequately capitalised for the risks inherent to the business written. Throughout 2017, the Company s capital level was maintained in accordance with the capital management policy. As at 31 December 2017, the Company s quarterly solvency ratio was 253% (2016: 232%) under Solvency I regime and 167% under Solvency II regime (2016: 164%). In 2017, the Company did conduct successfully for the fourth time ORSA (Own Risk Solvency Assessment) that analyses the solvency impact of various stresses and scenarios. Corporate governance Decisions engaging the Company may be taken at different levels: the General Meeting of Shareholders, the Board of Directors and the Managing Director. General Meeting of Shareholders The General Meeting of Shareholders is not involved in the day-to-day operations of the Company. Its role is to review and approve the strategy proposed by the Board of Directors and to control its implementation. To do so, the General Meeting of Shareholders is principally given the authority to appoint the Directors and the Managing Director and to approve the Annual Accounts. Board of Directors The Board of Directors of the Company is currently composed of seven Directors and is principally in charge of determining the Company s strategy. In this context, it reviews the means of achieving the objectives, establishes internal controls, monitors and evaluates the performance against the strategic plans and budgets. To do so, it is given all the powers not expressly reserved to the General Meeting of Shareholders by law or by the Articles of Association. Managing Director The Managing Director is in charge of day-to-day operations and has all the powers required to fulfil this role. The Managing Director is the preferred, if not exclusive, point of contact between the Company and the Commissariat aux Assurances. 8 / 32

10 DIRECTORS REPORT 3 Directors, appointments and resignations Situation as at year-end As of 31 December 2017, the Board of Directors is composed of seven Directors: Mr. Michel Wolter Mr. Paul Wolff Mr. Thierry Porté Mr. Marc Stevens Mr. Christopher Baker Mr. Jean-Luc Jancel Mr. Peter Yordan Director (Independent) and Chairman of the Board Director (Independent) Director (Group Executive Chairman) Director / Managing Director (Group Chief Executive Officer) Director (Independent) Director (Independent) Director (Non-executive) New appointment and resignations during the year: None. Subsequent events There are no subsequent events requiring a disclosure or that could affect the annual accounts of the Company for the year ended 31 December Luxembourg, 10 April 2018 Marc Stevens Managing Director Member of the Board of Directors 9 / 32

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16 5 THE ONELIFE COMPANY S.A. BALANCE SHEET AS AT 31 DECEMBER 2017 Assets EUR Note Intangible assets 4 7,192,751 7,966,861 Investments 5 104,509, ,979,181 Other financial investments 104,509, ,979,181 Shares and other variable yield transferable securities and units in unit trusts 15,037,159 3,865,431 Debt securities and other fixed income transferable securities 83,846, ,939,470 Other loans 126, ,280 Deposits with credit institutions 5,500,000 4,000,000 Investments for the benefit of life insurance policyholders who bear the investment risk 6 5,193,903,898 5,014,782,744 Reinsurers share of technical provisions - 42,137 Claims outstanding - 42,137 Debtors 28,501,675 23,429,906 Debtors arising out of direct insurance operations 180,128 1,512,208 Other debtors 7 28,321,547 21,917,698 Other assets 60,071,221 60,941,499 Tangible assets and stocks 8 300, ,417 Cash at bank and in hand 59,770,866 60,616,082 Prepayments and accrued income 22,601,297 25,540,594 Accrued interest and rent 1,178,645 1,430,192 Deferred acquisition costs 14,278,949 16,240,959 Other prepayments and accrued income 7,143,703 7,869,443 Total assets 5,416,780,317 5,250,682,922 The accompanying notes form an integral part of the Annual Accounts. 15 / 32

17 THE ONELIFE COMPANY S.A. BALANCE SHEET AS AT 31 DECEMBER Liabilities EUR Note Capital and reserves 9, 10 59,839,194 56,917,570 Subscribed capital 32,230,000 32,230,000 Share premium account 3,613,792 3,613,792 Reserves 8,188,350 8,188,350 Profit brought forward 9,885,428 8,453,152 Profit (Loss) for the financial year 5,921,624 4,432,276 Subordinated liabilities 7, 12 14,041,019 14,041,019 Technical provisions 94,881, ,249,997 Life insurance provision 94,819, ,049,209 Claims outstanding 62,528 52,672 Provision for bonuses and rebates 11-8,148,116 Technical provisions for life insurance policies where the investment risk is borne by the policyholders 5,193,903,898 5,014,782,744 Provisions for other risks and charges 9,627,688 9,440,937 Provisions for taxation 1,217,965 1,383,000 Other provisions 8,409,723 8,057,937 Creditors 12 43,148,122 43,102,910 Creditors arising out of direct insurance operations 35,912,269 39,851,662 Creditors arising out of reinsurance operations 173, ,133 Other creditors, including tax and social security 7 7,062,496 3,041,115 Accruals and deferred income 7 1,338,740 1,147,745 Total liabilities 5,416,780,317 5,250,682,922 The accompanying notes form an integral part of the Annual Accounts. 16 / 32

18 6 THE ONELIFE COMPANY S.A. PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2017 Technical account - life insurance business EUR Note Earned premiums, net of reinsurance ,767, ,547,572 Gross premiums written 505,625, ,451,193 Outward reinsurance premiums 15 (858,458) (903,621) Investment income 95,814,430 90,608,532 Income from other investments 47,806,314 53,920,958 Gains on realisation of investments 48,008,116 36,687,574 Unrealised gains on investments 429,547, ,362,924 Other technical income, net of reinsurance 3,616, ,820 Claims incurred, net of reinsurance (548,065,985) (548,477,285) Claims paid (548,013,992) (548,480,867) Claims paid, gross (548,154,880) (548,615,094) Claims paid, reinsurer s share , ,227 Change in the provisions for claims (51,993) 3,582 Change in the provisions for claims, gross (9,856) 17,916 Change in the provisions for claims, reinsurer s share 15 (42,137) (14,334) Change in other technical provisions, net of reinsurance (170,891,073) 130,191,609 Change in life insurance provision, net of reinsurance (170,891,073) 130,191,609 Change in life insurance provision, gross amount (170,891,073) 130,191,609 Bonuses and rebates, net of reinsurance 8,148,116 1,752,350 Net operating expenses (47,901,210) (56,007,307) Acquisition costs (22,049,004) (15,173,868) Change in deferred acquisition costs (1,962,010) (3,464,704) Administrative expenses 16, 17 (24,203,268) (37,781,389) Reinsurance commissions and profit participation , ,654 Investment charges (38,809,657) (56,956,798) Investment management charges, including interest (24,476,097) (21,085,676) Losses on realisation of investments (14,333,560) (35,871,122) Unrealised losses on investments (229,716,247) (423,307,552) Other technical charges, net of reinsurance (938,640) - Balance on the technical account - life insurance business 5,570,811 4,496,865 The accompanying Notes form an integral part of the Annual Accounts. 17 / 32

19 THE ONELIFE COMPANY S.A. PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER Non-technical account EUR Note Balance on the technical account life insurance business 5,570,811 4,496,865 Other Income 1,348, ,462 Tax on profit or loss on ordinary activities 20 - (6,420) Other charges, including value adjustments (690,790) (286,846) Profit (Loss) on ordinary activities after tax 6,228,088 4,693,061 Other taxes not shown under the preceding items 20 (306,464) (260,785) Profit (Loss) for the financial year 5,921,624 4,432,276 The accompanying Notes form an integral part of the Annual Accounts. 18 / 32

20 7 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2017 Note 1 General The OneLife Company S.A. (the Company ) is a life insurance company incorporated in the Grand- Duchy of Luxembourg under Luxembourg law as a Société Anonyme on 26 June 1990 under Luxembourg Commerce Register Number: B The Company is authorised by the Commissariat aux Assurances to provide life insurances, annuities, pensions and retirement benefits, and reinsurance operations of business of similar nature, and to conduct investment and real estate activity relating to the principal objective. The Company sources and administers its business through its head office in Luxembourg and through distribution partnerships in Luxembourg and other EU countries. The parent company of The OneLife Company S.A. is The OneLife Holding S.à r.l. (the parent company ) which is incorporated in Luxembourg. For the purposes of these Annual Accounts, The OneLife Holding S.à r.l. and all its subsidiaries are referred to as the Group. In June 2016, the Group completed a rebranding of all its business under one single name - OneLife. At the same time, following the decision of the Extraordinary General Meeting, dated 7 June 2016, Private Estate Life S.A. was renamed The OneLife Company S.A. As from 1 July 2016, all the activities carried out by FinAdmin E.I.G. ( FinAdmin ) and its employees have been transferred to The OneLife Company S.A. FinAdmin, an Economic Interest Grouping, was a Professional of the Financial Sector supervised by the Commission de Surveillance du Secteur Financier, providing services in support of the activities of Group undertakings, of which the Company was a member, and was dissolved on June Note 2 Presentation of Annual Accounts The Annual Accounts have been prepared in accordance with Luxembourg law on the accounts of insurance and reinsurance undertakings (the Law) of 8 December 1994 as amended and in compliance with the generally accepted accounting policies for the insurance and reinsurance industry in the Grand-Duchy of Luxembourg. The accounting policies and the valuation rules are determined and applied by the Board of Directors. The following significant general rules have been applied: the Company is on a going concern basis; the valuation methods are consistent from one financial year to the other, except where otherwise stated in the Annual Accounts; the prudence principle is followed; only realised profits are recognised, with the exception of life insurance business where the risk is borne by the policyholder; all foreseeable risks and potential losses which arise during the course of the financial year are taken into account; assets and liabilities are valued item by item. All amounts in these Annual Accounts are presented in Euro (EUR). 19 / 32

21 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 3 Accounting policies 3.1 Translation of items expressed in foreign currencies Assets and liabilities denominated in foreign currencies are translated into EUR at the exchange rates in effect at the balance sheet date. Income and charges denominated in foreign currencies are converted into EUR at the exchange rate prevailing at the transaction date. Gains and losses arising from foreign exchange translations are recognised in the Profit and Loss Account. 3.2 Intangible assets Intangible assets are valued at purchase price including the expenses incidental thereto or at production cost, less cumulated depreciation amounts. In case of durable depreciation in value, value adjustments are made in respect of intangible assets. The value adjustments are not maintained if the reasons for which the value adjustments were made have ceased to apply. Intangible assets are composed of goodwill and technical policy management software. The amortisation of the goodwill is recognised over an eight-year period, corresponding to the estimated lapse period of the in-force insurance portfolio of the absorbed entity at the date of the merger. The Custy Policy Administration Software module is amortised over a 7 year period which corresponds to its estimated useful life. The Company has built its strategy on the integration of business operations around this tailor-made software. Intangible assets are amortised over their estimated useful economic life, using the straight-line method at the following rate: Goodwill: 12.5% Software (Policy Administration module): 14.3% Software (other): 33% 3.3 Investments Other financial investments Shares and other variable yield transferable securities and units in unit trusts are valued at the lower of historical acquisition cost or realisable value (lower of cost or market). Debt securities and other fixed income transferable securities are valued at amortised cost. Premiums paid over the redemption value and discounts received in consideration of the redemption value are amortised through the Profit and Loss Account over the period to maturity. Deposits with credit institutions and other loans are valued at nominal value. 3.4 Investments for the benefit of life insurance policyholders who bear the investment risk Investments for the benefit of life insurance policyholders who bear the investment risk are valued at market value. Changes in the value of these investments are recognised in the Profit and Loss Account under Unrealised gains on investments and Unrealised losses on investments. 20 / 32

22 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER The market value of the investments has been determined according to the following methods: Transferable securities admitted to an official stock exchange listing or traded on another regulated market are valued based on the last available market price. If such securities are listed on several markets, the last known price on the principal market is applied; Transferable securities not admitted to an official stock exchange listing or not traded on another regulated market, and transferable securities admitted to an official stock exchange listing or traded on another regulated market, but for which the last available price is not representative, are valued based on their reasonably foreseeable price determined based on available information provided by the custodian banks, other price providers or in the financial statements of these investments. The value of Technical provisions for life insurance policies where the investment risk is borne by policyholders is set by reference to these investments. 3.5 Debtors Debtors are valued at the lower of their nominal and their probable realisation value. Value adjustments are made when recoverability is questionable, either in part or entirely. These value adjustments are no longer carried when the reasons for which they were made cease to apply. 3.6 Other assets Tangible assets and stocks Tangible assets are valued at purchase price including the expenses incidental thereto or at production cost. Tangible assets are amortised over their estimated useful economic lives, using the straight-line method at the following rates: Furniture: 20%, Fixture and fittings: over the remaining period of the lease or 20%. Where the Company considers that a tangible asset has suffered a durable depreciation in value, an additional write-off is recorded in order to reflect this loss. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply Cash at bank and in hand Cash at bank and in hand is valued at nominal value. 3.7 Prepayments and accrued income Deferred acquisition costs Acquisition costs relating to the life insurance policies are deferred and recognised as an asset. The deferred acquisition costs are amortised over the acquisition charge earning period, on a straightline basis. Additional amortisation is recorded on fully surrendered policies and on policy with significant partial surrenders Other prepayments and accrued income Other prepayments and accrued income include other expenditure incurred during the financial year which relates to a subsequent financial year and income relating to the current financial year, but which is not receivable until a subsequent financial year. 21 / 32

23 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Subordinated liabilities Subordinated loans are valued at nominal value. The interest expense on the loans is included in the Profit and Loss Account under Investment management charges, including interest. 3.9 Technical provisions Life insurance provision The Life insurance provision consists of the estimated actuarial value of the Company s insurance liabilities, less the estimated actuarial value of the policyholders commitments. It is calculated individually for each policy Claims outstanding The provision for claims outstanding corresponds to the total estimated cost, including claim settlement costs, for settling all the claims arising from events, which have occurred up to the end of the financial year, less amounts already paid in respect of such claims. The provision for claims outstanding is calculated separately for each claim and does not include any discounts or deductions. Reinsurers share in claims outstanding represents the part of the gross technical provisions that the Company is entitled to recover from reinsurers under contractual reinsurance arrangements Provision for bonuses and rebates The Provision for bonuses and rebates includes all amounts which are allocated to the revaluation of policyholders policies for the financial year, or which are set aside in their favour and which represent the allocation of a surplus arising from all financial transactions relating to the segregated funds linked to these policies, after deduction of costs stipulated in the policy Technical provisions for life insurance policies where the investment risk is borne by the policyholders Technical provisions cover liabilities relating to investments in the context of life insurance policies for which the value or the return is determined by reference to the investments for which the policyholder bears the risk. The change in technical provisions for life insurance policies where the investment risk is borne by the policyholders is reported in the Profit and Loss Account under the caption Change in other technical provisions, net of reinsurance Provisions for other risks and charges Provisions for taxation Provisions for taxation include the Company s best estimate of income tax liabilities for financial years for which a definitive taxation assessment has not yet been received from the fiscal authorities and final unpaid tax liabilities. Advance tax payments are recognised under Prepayments and accrued income Other provisions Other provisions are intended to cover losses or liabilities the nature of which is clearly defined and which, at the balance sheet date, are either likely to be incurred or certain to be incurred, but uncertain as to the amount or as to the date on which they will arise. 22 / 32

24 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Creditors Creditors are valued at settlement value Accruals and deferred income Accruals and deferred income consist of both income received before the balance sheet date, but relating to a subsequent financial year, and charges relating to the current financial year, but payable in a subsequent financial year Earned premiums, net of reinsurance Earned premiums include business issued during the year. Net earned premiums comprise outward reinsurance premiums consisting of premiums paid or payable with respect to outward reinsurance contracts entered into by the Company Claims incurred, net of reinsurance Claims incurred comprise all payments made in respect of the financial year and the movement in the provision for claims outstanding Investment income and charges Investment income comprises all investment income and realised investment gains. Investment charges include investment expenses, charges and interest expenses as well as realised losses on the disposal of investments Other technical income Other technical income comprises mainly trailer fees and income related to structured products purchases Acquisition costs Acquisition costs comprise direct costs arising from the conclusion of insurance policies and indirect costs relating to the sales structure, advertising and administrative costs connected with the issuance of policies Administrative expenses Administrative expenses include overheads, which cannot be allocated to the recording of premiums, the management of claims or the management of investments and commissions relating to the on-going management of policies Allocated investment return transferred to the non-technical account This income represents the total net investment return relating to assets that are transferred from the life insurance technical account to the non-technical account in order to better reflect the balance of the technical account relating to life business. Allocated investment return consists of dividends, realised gains and losses, and unrealised gains and losses arising from shareholder s investments. 23 / 32

25 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 4 Intangible assets As at 31 December 2017 and 2016, intangible assets include a goodwill, which has been recognised as a result of the acquisition in 2015 of 100% of the shares of Altraplan Luxembourg S.A. ( Altraplan ) by the Company and the subsequent merger by absorption of Altraplan by the Company. This goodwill amounts to EUR 2,007,610 and corresponds to the difference between the acquisition price of 100% of the shares of Altraplan and the value of its net asset value at the date of the merger. The acquisition price of Altraplan has been determined based on its estimated embedded value. In accordance with Note 3.2, an amortisation charge of EUR 250,952 has been recognised in the Profit and Loss Account for the year ended 31 December 2017 and 2016, in the caption administrative expenses. As at 31 December 2017, the Board of Directors believes that there is no permanent impairment on the net book value of the goodwill amounting to EUR 1,254,756. Other intangible assets are composed of technical software and developments transferred from FinAdmin when being absorbed by the Company as described in Note 1 and additional investments made after the transfer. As at 31 December 2017, the gross book value of intangible assets related to software amount to EUR 19,558,685 with cumulated depreciation amounting to EUR 13,620,690. The movements in intangible assets during the financial year are summarised as follows: EUR Goodwill Other Total Gross book value as at 31 December ,007,610 16,946,082 18,953,692 Additions and acquisitions of the year - 2,612,603 2,612,603 Gross book value as at 31 December ,007,610 19,558,685 21,566,295 Accumulated amortisation as at 31 December 2016 (501,902) (10,484,929) (10,986,831) Amortisation of the year (250,952) (3,135,761) (3,386,713) Accumulated amortisation as at 31 December 2017 (752,854) (13,620,690) (14,373,544) Net book value as at 31 December ,505,708 6,461,153 7,966,861 Net book value as at 31 December ,254,756 5,937,995 7,192, / 32

26 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 5 Other financial investments As at 31 December 2017, the book and market values of other financial investments are as follows: EUR Book value at Market value at Shares and other variable yield transferable securities and units in unit trusts 15,037,159 15,073,480 Debt securities and other fixed income transferable securities 83,846,226 86,274,984 Other loans 126, ,090 Deposits with credit institutions 5,500,000 5,500,000 Total 104,509, ,974,554 The amortisation of discounts and premiums on fixed income securities is as follows: EUR Amortisation of discounts 23,543 29,010 Amortisation of premiums 1,535,918 2,254,551 The amortisation of discount on fixed income securities is shown under caption Income from other investments. Discounts represent the negative difference between the purchase prices of these securities compared to the amount repayable at maturity and are written up in instalments over the period remaining until maturity. The amortisation of premium on fixed income securities is shown under caption Investment management charges, including interest. Premiums represent the positive difference between the purchase prices of securities compared to the amount repayable to maturity and are written down in instalments over the remaining period to maturity. The remaining unamortised discounts and premiums on fixed income securities are as follows: EUR Unamortised discounts 61,909 88,286 Unamortised premiums 3,970,118 5,486,261 Note 6 Investments for the benefit of life insurance policyholders who bear the investment risk As at 31 December 2017, investments for the benefit of life insurance policyholders who bear the investment risk amounted to EUR 5,193,903,898 (2016: EUR 5,014,782,744). 25 / 32

27 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 7 Amounts owed by and to affiliated undertakings Amounts owed by and to affiliated undertakings are as follows: EUR Assets 18,336,820 21,496,501 Other debtors 18,336,820 21,496,501 Liabilities 8,554,361 8,376,861 Other creditors, including tax and social security 309,053 - Accruals and deferred income 4, ,842 Subordinated liabilities 8,241,019 8,241,019 The subordinated liabilities are composed of two loans with The OneLife Holding S.à r.l. Note 8 Tangible assets The movements in tangible assets and stocks during the financial year are summarised as follows: EUR Furniture Fixture Hardware Total Gross book value as at 31 December ,395 1,290,141 22,087 1,624,623 Additions and acquisitions of the year - 36,936 17,402 54,338 Gross book value as at 31 December ,395 1,327,077 39,489 1,678,961 Accumulated amortisation as at 31 December 2016 (279,753) (997,672) (21,781) (1,299,206) Amortisation of the year (14,368) (64,298) (734) (79,400) Accumulated amortisation as at 31 December 2017 (294,121) (1,061,970) (22,515) (1,378,606) Net book value as at 31 December , , ,417 Net book value as at 31 December , ,107 16, , / 32

28 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 9 Capital and reserves The movements in capital and reserves during the financial year are broken down as follows: EUR Subscribed Capital Profit Share Premium Reserves brought forward Profit of the year Total As at 31 December ,230,000 3,613,792 8,188,350 8,453,152 4,432,276 56,917,570 Allocation of results Profit brought forward ,432,276 (1,432,276) - Dividend distributed (3,000,000) (3,000,000) Profit for the financial year ,921,624 5,921,624 As at 31 December ,230,000 3,613,792 8,188,350 9,885,428 5,921,624 59,839,194 During the annual general meeting of the Company s shareholder, held on 13 April 2017, it was resolved to distribute a dividend of EUR 3,000,000 to the sole shareholder of the Company. The subscribed capital amounts to EUR 32,230,000 and is represented by 1,300,000 shares. Note 10 Reserves The reserves amounting to EUR 8,188,350 (2016: EUR 8,188,350) are composed of the legal reserve of EUR 3,223,000 (2016: EUR 3,223,000) and a free reserve of EUR 4,965,350 (2016: EUR 4,965,350). In accordance with Luxembourg company law, the Company allocates 5% of its net profit for each financial year until the legal reserve balance reaches 10% of the issued share capital. The legal reserve is not available for distribution to shareholders, except upon dissolution of the Company. During 2017, no allocation was made to the legal reserve. The total balance reached 10% of the issued share capital on 27 May Note 11 Provision for bonus and rebates As at 31 December 2017, a balance of EUR 7,443,887, which was accounted for under provision for bonuses and rebates as at 31 December 2016, has been allocated to life insurance provision. 27 / 32

29 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 12 Classification of creditors according to duration As of 31 December 2017, the classification of creditors based on their duration is as follows: EUR More than 5 years Less than 5 years Creditors arising out of direct insurance operations - 35,912,269 Creditors arising out of reinsurance operations - 173,357 Other creditors, including tax and social security - 7,062,496 Subordinated liabilities 6,941,019 7,100,000 As of 31 December 2016, the classification of creditors based on their duration was as follows: EUR More than 5 years Less than 5 years Creditors arising out of direct insurance operations - 39,851,662 Creditors arising out of reinsurance operations - 210,133 Other creditors, including tax and social security - 3,041,115 Subordinated liabilities 14,041,019 - Note 13 Other creditors, including tax and social security Other creditors, including tax and social security amount to EUR 7,062,496 as at 31 December 2017 (2016: EUR 3,041,115), and include mainly VAT payable for EUR 520,714, general expenses payable of EUR 2,059,800 (2016: EUR 1,409,625) and related taxes amounting to EUR 1,730, : EUR 906,174). As at 31 December 2017, amounts owed to affiliated undertakings are EUR 309,053 (2016: nil). 28 / 32

30 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 14 Breakdown of gross premiums written Gross premiums include an amount of EUR 505,625,764 related to life insurance business (2016: EUR 353,451,193). Gross premiums written are broken down as follows: EUR Individual premiums 505,625, ,451,193 of which inwards reinsurance premium - 67,434 Premiums under group policies - - Total 505,625, ,451,193 EUR Periodic premiums 1,487,612 3,073,044 Single premiums 504,138, ,378,149 of which inwards reinsurance premium - 67,434 Total 505,625, ,451,193 EUR Premiums from non-bonus policies 16,732 25,225 Premiums from bonus policies 135, ,209 Premiums from policies where the investment risk is borne by policyholders 505,473, ,229,759 of which inwards reinsurance premium - 67,434 Total 505,625, ,451,193 The geographical distribution of gross premiums written is as follows: EUR Luxembourg 48,187,947 12,507,391 Other EU countries 457,338, ,479,511 Non EU countries 99, ,291 Total 505,625, ,451, / 32

31 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 15 Reinsurance balance For the year ended 31 December 2017, the net reinsurance balance of the technical account amounts to a charge of EUR (2016: charge of EUR 371,074). Note 16 Acquisition costs and commissions Acquisition costs include direct commissions and other acquisition expenses, including an allocation of staff costs, which represent the cost of business acquisition activity. The breakdown of the different commissions is as follows: EUR Acquisition commissions 4,168,247 4,510,809 Other commissions 18,936,016 22,484,830 of which Trail / Renewal 18,462,147 21,957,017 and Switching commissions 473, ,813 Other commissions are included in the Administrative expenses in the Profit and Loss Account. Note 17 Personnel employed during the year The average number of persons employed by the Company during 2017 amounted to 146 (2016: 160) and is broken down into the following categories: Number of persons Management Employees Total Employee related costs are included in administrative expenses and are broken down as follows: EUR Wages and salaries 11,797,773 11,997,003 Non periodical remuneration 1,540, ,603 Social security costs 1,799,808 1,776,206 of which pensions 896, ,123 Other costs 1,370,177 1,251, / 32

32 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 18 Remuneration to members of the Board of Directors Emoluments granted to the members of the Board of Directors by reason of their responsibilities with respect to the financial year 2017 amounted to EUR 200,000 (2016: EUR 150,000) and are included in Administrative expenses in the Profit and Loss Account. No commitments have been entered into with respect to retirement pensions for former members of the Board of the Company. Note 19 Commitments and advances granted to members of supervisory staff The Company has no commitments with respect to retirement pension for former senior management. No advances or credits have been granted to senior management during 2017 and The Company has no commitments with respect to guarantees of any kind entered into on account of senior management. Note 20 Taxes The Company is subject to the general tax regulations applicable to all companies in Luxembourg. The Company entered into a tax consolidation arrangement, together with other Group entities domiciled in Luxembourg. Note 21 Fees to the Réviseur d Entreprises Agréé The fees to the Réviseur d Entreprises Agréé accounted for the year ended 31 December 2017 are equal to the amount to EUR 175,139 inclusive of VAT (2016: EUR 218,135), of which EUR 166,871 (2016: EUR 204,750) relate to the audit of the statutory annual accounts and the related regulatory report ( rapport distinct in accordance with the circular letter 09/1 as amended, issued by the Commissariat aux Assurances), and EUR 8,268 (2016: EUR 13,385) fees for non-audit related services. The fees to the Réviseur d Entreprises Agréé are included in the Administrative expenses in the Profit and Loss Account. Note 22 Information relating to consolidation The annual accounts of the Company are included in the consolidated financial statements of its parent company, The OneLife Holding S.à r.l., that represents the smallest and the largest undertaking that draws up consolidated accounts. The consolidated financial statements are available at the registered office, located at 38, Parc d Activités de Capellen, L-8308 Capellen, Luxembourg. 31 / 32

33 NOTES TO THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER Note 23 Related party transactions Until June 2016, the Company was a member of FinAdmin, the purpose of which was to provide, among others, all services directly attributable to the accomplishment of commercial activities of its members, all of which are the members of the Group. As described in the Note 1, FinAdmin has been liquidated in the course of 2016 and its assets and liabilities have been transferred to the Company. In virtue of a reinsurance agreement signed between Altraplan and PEL Altraplan Gibraltar PCC Limited on 27 June 2014, for which the rights and obligations were subsequently transferred to the Company and to Augura Life Ireland dac, a reinsurance premium of EUR 67,434 has been accounted for during the year ended 31 December 2016 (2017: nil). Reference is made to Note 7 regarding the amounts owed by and to affiliated undertakings. Note 24 Off-balance sheet commitments and contingencies As at 31 December 2017, the Company has commitments amounting to EUR 2,518,240 (2016: EUR 2,846,449) in relation to IT hardware, software and IT contractors, commitments amounting to EUR 815,950 (2016: EUR 357,940) in relation to car leasing contractors and commitments amounting to EUR 3,644,597 (VAT included) in relation to building lease (2016: EUR 4,450,789). Note 25 Subsequent event There are no subsequent events requiring a disclosure or that could affect the annual accounts of the Company for the year ended 31 December / 32

34 This presentation of the Annual Accounts of The OneLife Company S.A. is the sole property of The OneLife Company S.A. (hereunder referred to as OneLife). It is intended only to provide general information on the Annual Accounts of the OneLife Company S.A. Any and all information, data, analyses, comments, simulations, advice and opinions presented hereunder are provided for information purposes only and are not intended as an offer to sell or solicitation for the purchase or sale of any life assurance product or any other financial product or service. OneLife does not warrant, represent or guarantee that the information contained within these pages is complete, accurate or up-to-date and only the documents signed and published on the Electronic Register of Companies and Associations (RESA: Registre Electronique des Sociétés et Associations) should be relied on. OneLife expressly disclaims any and all liability to any person in respect of any direct or indirect loss, action or omission done wholly or partly in reliance upon the whole or any part of the contents of this presentation. All materials contained and shown on this presentation, including any and all information, publications, data, pictures, logos, trademarks, etc., are protected by copyright. All rights reserved to OneLife on such materials. It is formally prohibited to use, represent or reproduce such materials, whether in whole or in part, in any form and by any means, unless with the prior written agreement of OneLife as owner of such materials. onelife.eu.com T (+352) F (+352) E info@onelife.eu.com The OneLife Company S.A. 38 Parc d Activités de Capellen BP 110 L-8303 Capellen Luxembourg RCS Luxembourg B34.402